How to Handle Recruitment Fee Disputes

Recruitment can be an incredibly rewarding career, as you help others find vocations and roles that they find truly fulfilling or simply aid someone who is currently down on their luck. No matter what some people on LinkedIn may say recruitment fulfils a necessary role in the working world. However, as with any positive, there are always negative factors which can impact your working life also.

In particular, this negative often crop up when it comes to sorting out the all-important fees; you may suddenly find your previously happy client is suddenly and mysteriously silent. Emails go unanswered, calls ring through and you just can’t seem to get a firm hold of them. It seems you have been ghosted and your fees for a job well done are left unpaid.

Under such circumstances, it is understandable that you may feel annoyed, hurt and taken for a fool. But, the reality is that as a recruiter you will come across this scenario many more times than you will feel comfortable with. Unfortunately, some clients simply don’t want to pay even when you find them the perfect candidate.

So, what can you do to both stop fees being unpaid in the first place and handling the problem when it does happen?

Are Your Terms Binding?

The problem - and often the argument that many client’s uses when refusing to pay fees - many recruiters face is whether or not theterms of their business is legally binding. For example, were fees and overall terms of business communicated and accepted by the client? Proving this has been the case is crucial in order to ensure fees can be successfully claimed. To be binding this must go beyond a verbal agreement as this can be easily disputed or outright denied.

Getting your client’s agreement in writing, then, is vital to ensure you can resolve fee disputes quickly. And, luckily, this does not even have to include a signature on their part. Simply agreeing via email is considered a form of written and agreement, so can also be binding in such situations.

Effective Cause

The law of effective cause is simply that an agent can only demand a fee if they were the ‘effective cause’ of the hiring that took place. This is often an obvious case of following along the process the recruiter has used to place the candidate. Typically, email chains following the sourcing of candidates CVs, first contact with the candidate, arranging an interview and so on are enough to prove effective cause. However, it is important to note that this shouldn’t be taken for granted as facts will always be specific to individual cases.

As a recruiter, you need to keep track of your candidate stream and the hiring process they undergo. Take screenshots, gather your evidence and keep it on hand. You may never need to use it - fingers crossed - but, it can be invaluable to achieving your fees if you do. Dedicatedcorporate solicitorscan help to determine what evidence you need and how to handle such a dispute if it does make its way to court.

Evidence Provided

Disputes over recruitment fees tend to hinge on the wording of terms of business. But, it can also be proved or disproved on the how and what caused the candidate to actually be hired in the end. A detailed timeline of events - including introduction, interview, salary negotiation, offer and acceptance - can critically alter the legal outcome. There will be a number of times where the evidence provided will unfairly shift the favour in weight of the client. Again, ensure that your own is in order and clear in order to try and have as much of a case as possible.

Avoiding ‘Back Door’ Hiring

At the end of the day, there will always be some employers who seek to go around the introduction made by a recruiter in order to avoid paying any fees. So-called ‘back door’ hiring practices can be a nuisance, but often you may be told to simply let it go in order to maintain a good relationship with this client in the future and for other potential hires. Some people even claim that recruits may deserveback door treatmentin some cases, which makes the whole issue even more contentious for those involved.

Learning to pick your battles, being reasonable and only pursuing legal action in cases where you feel truly hard done by can be the best way to manage non-payments when they arise. Otherwise, you would find yourself in the mediation process or court every other week.